VSME

Voluntary Sustainability Reporting Standard for Small and Medium Enterprises (VSME): Sustainability reporting for small and medium-sized enterprises

What is the VSME standard?

The term VSME stands for Voluntary Sustainability Reporting Standard for Small and Medium Enterprises and describes a voluntary reporting framework that is specifically tailored to the needs of small and medium-sized enterprises (SMEs). In an increasingly regulated and sustainability-oriented economy, this standard represents a low-threshold option for systematically recording and disclosing relevant environmental, social and governance (ESG) issues. The standard is aimed at non-listed companies and is particularly suitable for micro, small and medium-sized enterprises that are not directly covered by the CSRD. The aim is to create transparency without burdening SMEs with excessive bureaucracy, while at the same time enabling them to align their content with existing regulatory frameworks such as the CSRD or EU taxonomy.

Historical development and current status of the VSME

The development of the VSME standard comes in the context of growing regulatory requirements in the EU, in particular the Corporate Sustainability Reporting Directive (CSRD). Even though many SMEs are not directly subject to this reporting requirement, they are coming under increasing pressure to disclose ESG information due to their role in complex supply chains. The need for an easy-to-use but robust reporting framework has grown significantly. The VSME standard was developed in response to this need and published by EFRAG in 2024. It is based on the principles of European sustainability regulation, but has been deliberately designed to be applicable even with limited resources. It enables SMEs to document their sustainability performance in a credible and structured manner, which not only secures regulatory compliance but can also generate business benefits.

VSME standard: relevant regulatory and economic aspects

Although VSME is a voluntary standard, its importance in everyday business is growing steadily. Companies that are part of global or EU-wide supply chains are increasingly being asked by their business partners to provide ESG data. The VSME standard provides a concrete framework for this, enabling even smaller companies to respond professionally and transparently. This can be crucial for winning new customers, retaining existing customers or winning tenders. Banks and investors are also increasingly evaluating the sustainability performance of their partners – structured ESG communication can therefore improve access to capital and financing. In addition, the standard contributes to internal process optimisation. The systematic collection of energy consumption, emissions or social indicators promotes data-driven decisions and enables an informed discussion of environmental and social risks. This makes VSME not only a response to external requirements, but also a lever for strategic corporate development.

Conclusion

The VSME standard offers small and medium-sized enterprises a pragmatic and effective entry point into sustainability reporting. It combines clarity with connectivity and enables companies to make their sustainability strategy visible – even if there is no formal reporting requirement yet. At a time when ecological and social responsibility are becoming key criteria for economic resilience, VSME offers a flexible, forward-looking tool for credibly communicating and actively shaping sustainable action.